NOTE PURCHASE AGREEMENT Dated as of June 9, 2006 Among CONTINENTAL AIRLINES, INC., Owner, and WILMINGTON TRUST COMPANY, Not in its individual capacity except as expressly provided herein, but solely as Mortgagee, Subordination Agent under the...
|
CONFIDENTIAL:
Subject to Restrictions on Dissemination
Set
Forth in Section 7 of this
Agreement
|
Dated
as
of June 9, 2006
Among
CONTINENTAL
AIRLINES, INC.,
Owner,
and
WILMINGTON
TRUST COMPANY,
Not
in
its individual capacity
except
as
expressly provided herein,
but
solely as Mortgagee, Subordination Agent
under
the
Intercreditor Agreement and Pass Through Trustee
under
each of the Pass Through Trust Agreements
|
SECTION
1. DEFINITIONS AND
CONSTRUCTION
|
2
|
|
|
SECTION
2. SECURED LOANS;
CLOSING
|
2
|
|
|
2
|
||
|
2.2 Closing
|
2
|
|
|
SECTION
3. [Intentionally
omitted.]
|
3
|
|
|
SECTION
4. CONDITIONS
PRECEDENT
|
3
|
|
|
3
|
||
|
6
|
||
|
6
|
||
|
7
|
||
|
SECTION
5. REPRESENTATIONS AND
WARRANTIES
|
7
|
|
|
7
|
||
|
9
|
||
|
SECTION
6. COVENANTS, UNDERTAKINGS AND
AGREEMENTS
|
12
|
|
|
12
|
||
|
6.2 Covenants
of WTC
|
13
|
|
|
14
|
||
|
6.4 Agreements
|
15
|
|
|
SECTION
7. CONFIDENTIALITY
|
15
|
|
|
SECTION
8. INDEMNIFICATION AND
EXPENSES
|
16
|
|
|
16
|
||
|
8.2 Expenses
|
20
|
|
|
21
|
||
|
8.4 Payments
|
28
|
|
|
8.5 Interest
|
28
|
|
|
29
|
||
|
SECTION
9. ASSIGNMENT OR TRANSFER OF
INTEREST
|
29
|
|
|
9.1 Note
Holders
|
29
|
|
|
29
|
||
|
SECTION
10. SECTION 1110
|
29
|
|
|
SECTION
11. CHANGE OF
CITIZENSHIP
|
30
|
|
|
30
|
||
|
30
|
||
Page
i
|
SECTION
12. MISCELLANEOUS
|
30
|
|
|
12.1 Amendments
|
30
|
|
|
12.2 Severability
|
30
|
|
|
12.3 Survival
|
31
|
|
|
31
|
||
|
12.5 Counterparts
|
31
|
|
|
12.6 No
Waiver
|
31
|
|
|
12.7 Notices
|
31
|
|
|
32
|
||
|
33
|
||
|
12.10 Entire
Agreement
|
33
|
|
|
12.11 Further
Assurances
|
33
|
|
SCHEDULES
SCHEDULE
1 - Accounts;
Addresses
SCHEDULE
2 - Certain
Terms
EXHIBITS
EXHIBIT
A
- Opinion
of Special Counsel to Owner
EXHIBIT
B
- Opinion
of Legal Department of Owner
EXHIBIT E
- Existing
Security Release
NOTE
PURCHASE AGREEMENT, dated as of June 9, 2006 (this “Agreement”), among
(a) CONTINENTAL AIRLINES, INC., a Delaware corporation (“Owner”),
(b) WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity, except as expressly provided herein, but solely as
Mortgagee (in its capacity as Mortgagee, “Mortgagee” and in its individual
capacity, “WTC”), (c) WILMINGTON TRUST COMPANY, not in its individual
capacity, except as expressly provided herein, but solely as Pass Through
Trustee under each of the Pass Through Trust Agreements (each, a “Pass Through
Trustee”) and (d) WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly provided herein, but solely as Subordination Agent under
the
Intercreditor Agreement (“Subordination Agent”).
RECITALS
A. Owner
is
the owner of the Pledged Spare Parts, and the Owner wishes to issue and sell
the
Equipment Notes, to be secured by, among other things, the Pledged Spare Parts.
The Pledged Spare Parts are currently subject to a Lien securing the Existing
Securities, which have been called for redemption on the Closing Date.
B. Pursuant
to each of the Pass Through Trust Agreements, the Pass Through Trusts were
created and the Pass Through Certificates were issued and sold.
C. Each
Pass
Through Trustee has agreed to use the proceeds from the issuance and sale of
the
Pass Through Certificates issued by the applicable Pass Through Trust to
purchase from Owner, on behalf of the related Pass Through Trust, the Equipment
Note bearing the same interest rate as the Pass Through Certificates issued
by
such Pass Through Trust.
D. Owner
and
Mortgagee, concurrently with the execution and delivery hereof, have entered
into the Trust Indenture for the benefit of the Note Holders, pursuant to which,
among other things, Owner agrees (1) to issue Equipment Notes, in the amounts
and otherwise as provided in the Trust Indenture, and (2) to mortgage,
pledge and assign to Mortgagee all of Owner’s right, title and interest in the
Collateral to secure the Secured Obligations, including, without limitation,
Owner’s obligations under the Equipment Notes.
E. Upon
issuance of the Equipment Notes, Owner will use a portion of the proceeds from
the issuance of the Equipment Notes to redeem the Existing Securities on the
Closing Date.
F. The
parties hereto wish to set forth in this Agreement the terms and conditions
upon
and subject to which the aforesaid transactions shall be effected.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
|
DEFINITIONS
AND CONSTRUCTION
|
Capitalized
terms used but not defined herein (including in the initial paragraph and
Recitals above) shall have the respective meanings set forth or incorporated
by
reference, and shall be construed and interpreted in the manner described,
in
Annex A to the Trust Indenture.
|
SECURED
LOANS; CLOSING
|
|
Making
of Loans and Issuance of Equipment
Notes
|
Subject
to the terms and conditions of this Agreement, at the closing under the
Underwriting Agreement, upon receipt by the Pass Through Trustees of the
proceeds from the sale of the Pass Through Certificates:
|
(a)
|
the
Class G Pass Through Trustee shall make a secured loan to the Owner
in the amount of $190,000,000, to be evidenced by a Series G
Equipment Note;
|
|
(b)
|
the
Class B Pass Through Trustee shall make a secured loan to the Owner
in the amount of $130,000,000, to be evidenced by a Series B
Equipment Note;
|
|
(c)
|
the
Owner shall issue, pursuant to and in accordance with the provisions
of
Article II of the Trust Indenture, to the Subordination Agent as
the
registered holder on behalf of each such Pass Through Trustee, one
or more
Equipment Notes, dated the Closing Date, of the Series set forth
above
with respect to such Pass Through Trustee, in an aggregate principal
amount equal to the secured loan made by such Pass Through Trustee;
|
|
(d)
|
the
Owner directs the Pass Through Trustees to transfer a portion of
the
proceeds from such secured loans in an amount equal to the Redemption
Price to WTC, as Existing Trustee, to be applied by the Existing
Trustee
on the Closing Date to the redemption of the Existing Securities,
and to
transfer the balance of such proceeds to the Owner; and
|
|
(e)
|
the
Owner will cause the Existing Security Release to be filed for recordation
with the FAA.
|
|
Closing
|
(a) The
Closing shall take place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as
the
parties shall agree.
(b) All
payments pursuant to this Section 2 shall be made in immediately available
funds
to the accounts set forth in Schedule 1 hereto opposite the name of the
recipients of such payments.
|
[Intentionally
omitted.]
|
|
CONDITIONS
PRECEDENT
|
|
Conditions
Precedent to the Obligations of the Pass Through
Trustees
|
The
obligation of each Pass Through Trustee to make its secured loan described
in
Section 2.1 and to participate in the transactions contemplated by this
Agreement on the Closing Date is subject to the fulfillment, prior to or on
the
Closing Date, of the following conditions precedent:
|
4.1.1
|
Equipment
Notes
|
The
Owner
shall have tendered the Equipment Notes to be issued to the Pass Through
Trustees to the Mortgagee for authentication and the Mortgagee shall have
authenticated such Equipment Notes to be issued to such Pass Through Trustees
and shall have tendered the Equipment Notes to the Subordination Agent on behalf
of each such Pass Through Trustee, against receipt of the loan proceeds, in
accordance with Section 2.1.
|
4.1.2
|
Delivery
of Documents
|
The
Subordination Agent on behalf of each such Pass Through Trustee shall have
received executed counterparts or conformed copies of the following
documents:
(i) this
Agreement;
(ii) the
Trust
Indenture;
(iii) the
broker’s report and insurance certificates required by Section 4.09 of the
Trust Indenture;
(iv) (A) a
copy of the Certificate of Incorporation and By-Laws of Owner and resolutions
of
the board of directors of Owner and/or the executive committee thereof, in
each
case certified as of the Closing Date, by the Secretary or an Assistant
Secretary of Owner, duly authorizing the execution, delivery and performance
by
Owner of the Operative Agreements to which it is party required to be executed
and delivered by Owner on or prior to the Closing Date in accordance with
the
provisions hereof and thereof; and (B) an incumbency certificate of Owner
as to the person or persons authorized to execute and deliver the Operative
Agreements on behalf of Owner;
(v) an
Officer’s Certificate of Owner, dated as of the Closing Date, stating that its
representations and warranties set forth in this Agreement are true and correct
as of the Closing Date (or, to the extent that any such representation and
warranty expressly relates to an earlier date, true and correct as of such
earlier date);
(vi) the
Financing Statements;
(vii) the
following opinions of counsel, in each case dated the Closing
Date:
(A) an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to Owner,
substantially in the form of Exhibit A;
(B) an
opinion of Owner’s Legal Department, substantially in the form of
Exhibit B;
(C) an
opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel to Mortgagee and to
the Pass Through Trustees, substantially in the form of Exhibit C;
and
(D) an
opinion of ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel in Oklahoma City, Oklahoma,
substantially in the form of Exhibit D; and
(viii) the
Collateral Maintenance Agreement.
|
4.1.3
|
Perfected
Security Interest
|
On
the
Closing Date, after giving effect to the filing of the FAA Filed Documents
and
the Financing Statements, Mortgagee shall have received a duly perfected first
priority security interest in all of Owner’s right, title and interest in the
Pledged Spare Parts, subject only to Permitted Liens.
|
4.1.4
|
Violation
of Law
|
No
change
shall have occurred after the date of this Agreement in any applicable Law
that
makes it a violation of Law for (a) Owner, any Pass Through Trustee,
Subordination Agent or Mortgagee to execute, deliver and perform the Operative
Agreements to which any of them is a party or (b) any Pass Through Trustee
to make the loan contemplated by Section 2.1, to acquire an Equipment Note
or to
realize the benefits of the security afforded by the Trust
Indenture.
|
4.1.5
|
Representations,
Warranties and Covenants
|
The
representations and warranties of each other party to this Agreement made,
in
each case, in this Agreement and in any other Operative Agreement to which
it is
a party, shall be true and accurate in all material respects as of the Closing
Date (unless any such representation and warranty shall have been made with
reference to a specified date, in which case such representation and warranty
shall be true and accurate as of such specified date) and each other party
to
this Agreement shall have performed and observed, in all material respects,
all
of its covenants, obligations and agreements in this Agreement and in any other
Operative Agreement to which it is a party to be observed or performed by it
as
of the Closing Date.
|
4.1.6
|
No
Event of Default
|
On
the
Closing Date, no event shall have occurred and be continuing, or would result
from the mortgage of the Pledged Spare Parts, which constitutes a Default or
an
Event of Default.
|
4.1.7
|
Release
of Existing Security
Agreement
|
The
Existing Security Agent shall have tendered to Owner the Existing Security
Release, against receipt of the Redemption Price (as defined in Schedule 2),
and
the Existing Security Release shall be prepositioned with FAA counsel to be
filed promptly on the Closing Date after receipt of the Redemption Price by
the
Existing Trustee.
|
4.1.8
|
Section
1110
|
Mortgagee
shall be entitled to the benefits of Section 1110 (as currently in effect)
with respect to the right to take possession of the Pledged Spare Parts and
to
enforce any of its other rights or remedies as provided in the Trust Indenture
in the event of a case under Chapter 11 of the Bankruptcy Code in which
Owner is a debtor.
|
4.1.9
|
Filing
|
On
the
Closing Date (a) the FAA Filed Documents (excluding the Existing Security
Release) shall have been duly filed for recordation (or shall be in the process
of being so duly filed for recordation) with the FAA in accordance with the
Act
and (b) each Financing Statement shall have been duly filed (or shall be in
the process of being so duly filed) in the appropriate
jurisdiction.
|
4.1.10
|
No
Proceedings
|
No
action
or proceeding shall have been instituted, nor shall any action be threatened
in
writing, before any Government Entity, nor shall any order, judgment or decree
have been issued or proposed to be issued by any Government Entity, to set
aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or any other Operative Agreement or the transactions contemplated
hereby or thereby.
|
4.1.11
|
Governmental
Action
|
All
appropriate action required to have been taken prior to the Closing Date by
the
FAA, or any governmental or political agency, subdivision or instrumentality
of
the United States, in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals of such entities required to be in
effect on the Closing Date in connection with the transactions contemplated
by
this Agreement shall have been issued.
|
4.1.12
|
Title
|
Owner
shall have good and marketable title to the Pledged Spare Parts as of the
Closing Date, free and clear of all Liens, except Permitted
Liens.
|
Conditions
Precedent to Obligations of
Mortgagee
|
The
obligation of Mortgagee to authenticate the Equipment Notes on the Closing
Date
is subject to the satisfaction or waiver by Mortgagee, on or prior to the
Closing Date, of the conditions precedent set forth below in this Section
4.2.
|
4.2.1
|
Documents
|
Executed
originals of the agreements, instruments, certificates or documents described
in
Section 4.1.2 shall have been received by Mortgagee, except as specifically
provided therein, unless the failure to receive any such agreement, instrument,
certificate or document is the result of any action or inaction by
Mortgagee.
|
4.2.2
|
Other
Conditions Precedent
|
Each
of
the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6, 4.1.8, 4.1.9,
4.1.10 and 4.1.11 shall have been satisfied unless the failure of any such
condition to be satisfied is the result of any action or inaction by
Mortgagee.
|
Conditions
Precedent to Obligations of
Owner
|
The
obligation of Owner to participate in the transaction contemplated hereby on
the
Closing Date is subject to the satisfaction or waiver by Owner, on or prior
to
the Closing Date, of the conditions precedent set forth below in this
Section 4.3.
|
4.3.1
|
Documents
|
Executed
originals of the agreements, instruments, certificates or documents described
in
Section 4.1.2 shall have been received by Owner, except as specifically
provided therein, and shall be satisfactory to Owner, unless the failure to
receive any such agreement, instrument, certificate or document is the result
of
any action or inaction by Owner. In addition, the Owner shall have received
the
following:
(i) (A) an
incumbency certificate of WTC as to the person or persons authorized to execute
and deliver the Operative Agreements on behalf of WTC and (B) a copy of the
Certificate of Incorporation and By-Laws and general authorizing resolution
of
the board of directors (or executive committee) or other satisfactory evidence
of authorization of WTC, certified as of the Closing Date by the Secretary
or
Assistant or Attesting Secretary of WTC, which authorize the execution, delivery
and performance by WTC of the Operative Agreements to which it is a party;
and
(ii) an
Officer’s Certificate of WTC, dated as of the Closing Date, stating that its
representations and warranties in its individual capacity or as Mortgagee,
a
Pass Through Trustee or Subordination Agent, as the case may be, set forth
in
this Agreement are true and correct as of the Closing Date (or, to the extent
that any such representation and warranty expressly relates to an earlier
date,
true and correct as of such earlier date).
|
4.3.2
|
Other
Conditions Precedent
|
Each
of
the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.10 and
4.1.11 shall have been satisfied or waived by Owner, unless the failure of
any
such condition to be satisfied is the result of any action or inaction by
Owner.
|
Post-Recordation
Opinion
|
Promptly
upon the recordation of the FAA Filed Documents pursuant to the Act, Owner
will
cause ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel in Oklahoma City, Oklahoma, to
deliver to Owner, each Pass Through Trustee, Mortgagee, each Liquidity Provider
and the Policy Provider a favorable opinion or opinions addressed to each of
them with respect to such registration and recordation.
|
REPRESENTATIONS
AND WARRANTIES
|
|
Owner’s
Representations and
Warranties
|
Owner
represents and warrants to each Pass Through Trustee, Subordination Agent and
Mortgagee that:
|
5.1.1
|
Organization;
Qualification
|
Owner
is
a corporation duly incorporated, validly existing and in good standing under
the
Laws of the State of Delaware and has the corporate power and authority to
conduct the business in which it is currently engaged and to own or hold under
lease its properties and to enter into and perform its obligations under the
Operative Agreements to which it is party. Owner is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in
which
the nature and extent of the business conducted by it, or the ownership of
its
properties, requires such qualification, except where the failure to be so
qualified would not give rise to a Material Adverse Change to
Owner.
|
5.1.2
|
Corporate
Authorization
|
Owner
has
taken, or caused to be taken, all necessary corporate action (including, without
limitation, the obtaining of any consent or approval of stockholders required
by
its Certificate of Incorporation or By-Laws) to authorize the execution and
delivery of each of the Operative Agreements to which it is party, and the
performance of its obligations thereunder.
|
5.1.3
|
No
Violation
|
The
execution and delivery by Owner of the Operative Agreements to which it is
party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby, do not and will not (a) violate any provision of the Certificate
of Incorporation or By-Laws of Owner, (b) violate any Law applicable to or
binding on Owner or (c) violate or constitute any default under (other than
any violation or default that would not result in a Material Adverse Change
to
Owner), or result in the creation of any Lien (other than as permitted under
the
Trust Indenture) upon any Pledged
Spare
Part under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other material agreement, instrument
or document to which Owner is a party or by which Owner or any of its properties
is bound.
|
5.1.4
|
Approvals
|
The
execution and delivery by Owner of the Operative Agreements to which Owner
is a
party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby do not and will not require the consent or approval of, or the giving
of
notice to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (a) any trustee or
other holder of any debt of Owner and (b) any Government Entity, other than
the filing of (x) the FAA Filed Documents and the Financing Statements (and
continuation statements periodically) and (y) filings, recordings, notices
or other ministerial actions pursuant to any routine recording, contractual
or
regulatory requirements applicable to it.
|
5.1.5
|
Valid
and Binding Agreements
|
The
Operative Agreements to which Owner is a party have been duly authorized,
executed and delivered by Owner and, assuming the due authorization, execution
and delivery thereof by the other party or parties thereto, constitute the
legal, valid and binding obligations of Owner and are enforceable against Owner
in accordance with the respective terms thereof, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar Laws affecting the rights of creditors generally
and general principles of equity, whether considered in a proceeding at law
or
in equity.
|
5.1.6
|
Registration
and Recordation
|
Except
for (a) the filing for recordation (and recordation) of the FAA Filed
Documents and (b) the filing of the Financing Statements (and continuation
statements relating thereto at periodic intervals), no further action, including
any filing or recording of any document (including any financing statement
in
respect thereof under Article 9 of the UCC) is necessary in order to establish
and perfect Mortgagee’s security interest in the Pledged Spare Parts as against
Owner and any other Person, in each case, in any applicable jurisdictions in
the
United States.
|
5.1.7
|
Owner’s
Location
|
The
Owner’s location (as such term is used in Section 9-307 of the UCC) is
Delaware. The full and correct legal name and mailing address of Owner are
correctly set forth in Schedule 1 hereto in the column “Address for
Notices”.
|
5.1.8
|
Compliance
With Laws
|
(a) Owner
is
a Citizen of the United States and a U.S. Air Carrier.
(b) Owner
holds all licenses, permits and franchises from the appropriate Government
Entities necessary to authorize Owner to lawfully engage in air transportation
and to carry on scheduled commercial passenger service as currently conducted,
except where the
failure
to so hold any such license, permit or franchise would not give rise to a
Material Adverse Change to Owner.
(c) Owner
is
not an “investment company” or a company controlled by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.
|
5.1.9
|
Securities
Laws
|
Neither
Owner nor any person authorized to act on its behalf has directly or indirectly
offered any beneficial interest or Security relating to the ownership of any
Pledged Spare Part, or any of the Equipment Notes or any other interest in
or
Security under the Trust Indenture, for sale to, or solicited any offer to
acquire any such interest or Security from, or has sold any such interest or
Security to, any person in violation of the Securities Act.
|
5.1.10
|
Broker’s
Fees
|
No
Person
acting on behalf of Owner is or will be entitled to any broker’s fee, commission
or finder’s fee in connection with the Transactions, other than the fees and
expenses payable by Owner in connection with the sale of the Pass Through
Certificates.
|
5.1.11
|
Section
1110
|
Mortgagee,
on behalf of the Note Holders and the Indenture Indemnitees, is entitled to
the
benefits of Section 1110 (as currently in effect) with respect to the right
to
take possession of the Pledged Spare Parts and to enforce any of its other
rights or remedies as provided in the Trust Indenture and the Collateral
Maintenance Agreement in the event of a case under Chapter 11 of the Bankruptcy
Code in which Owner is a debtor.
|
5.1.12
|
Title
|
The
Owner
has good and marketable title to the Pledged Spare Parts as of the Closing
Date,
free and clear of all Liens, except Permitted Liens.
|
WTC’s
Representations and
Warranties
|
WTC
represents and warrants (with respect to Section 5.2.10, solely in its
capacity as Subordination Agent) to Owner that:
|
5.2.1
|
Organization,
Etc.
|
WTC
is a
Delaware banking corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, holding a valid certificate
to
do business as a Delaware banking corporation with banking authority to execute
and deliver, and perform its obligations under, the Pass Through Trustee
Agreements and the Operative Agreements to which it is a party.
|
5.2.2
|
Corporate
Authorization
|
WTC
has
taken, or caused to be taken, all necessary corporate action (including, without
limitation, the obtaining of any consent or approval of stockholders required
by
Law or by its Certificate of Incorporation or By-Laws) to authorize the
execution and delivery by WTC, in its individual capacity or as Mortgagee,
a
Pass Through Trustee or Subordination Agent, as the case may be, of the Pass
Through Trustee Agreements and the Operative Agreements to which it is a party
and the performance of its obligations thereunder.
|
5.2.3
|
No
Violation
|
The
execution and delivery by WTC, in its individual capacity or as Mortgagee,
a
Pass Through Trustee or Subordination Agent, as the case may be, of the Pass
Through Trustee Agreements and the Operative Agreements to which it is a party,
the performance by WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, as the case may be, of its obligations
thereunder and the consummation on the Closing Date of the transactions
contemplated thereby, do not and will not (a) violate any provision of the
Certificate of Incorporation or By-Laws of WTC, (b) violate any Law
applicable to or binding on WTC, in its individual capacity or (except in the
case of any Law relating to any Plan) as Mortgagee, a Pass Through Trustee
or
Subordination Agent, or (c) violate or constitute any default under (other
than any violation or default that would not result in a Material Adverse Change
to WTC, in its individual capacity or Mortgagee, a Pass Through Trustee or
Subordination Agent), or result in the creation of any Lien (other than the
Lien
of the Trust Indenture) upon any property of WTC, in its individual capacity
or
as Mortgagee, a Pass Through Trustee or Subordination Agent, or any of WTC’s
subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other agreement, instrument or
document to which WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, is a party or by which WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, or any of their respective properties is bound.
|
5.2.4
|
Approvals
|
The
execution and delivery by WTC, in its individual capacity or as Mortgagee,
a
Pass Through Trustee or Subordination Agent, as the case may be, of the Pass
Through Trustee Agreements and the Operative Agreements to which it is a party,
the performance by WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, as the case may be, of its obligations
thereunder and the consummation on the Closing Date by WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as
the
case may be, of the transactions contemplated thereby do not and will not
require the consent, approval or authorization of, or the giving of notice
to,
or the registration with, or the recording or filing of any documents with,
or
the taking of any other action in respect of, (a) any trustee or other
holder of any Debt of WTC or (b) any Government Entity, other than the
filing of the FAA Filed Documents and the Financing Statements.
|
5.2.5
|
Valid
and Binding Agreements
|
The
Pass
Through Trustee Agreements and the Operative Agreements to which it is a party
have been duly authorized, executed and delivered by WTC and, assuming the
due
authorization, execution and delivery by the other party or parties thereto,
constitute the legal, valid and binding obligations of WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as
the
case may be, and are enforceable against WTC, in its individual capacity or
as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
in
accordance with the respective terms thereof, except as such enforceability
may
be limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other similar Laws affecting the rights of creditors generally and general
principles of equity, whether considered in a proceeding at law or in
equity.
|
5.2.6
|
Citizenship
|
WTC
is a
Citizen of the United States.
|
5.2.7
|
No
Liens
|
On
the
Closing Date, there are no Liens attributable to WTC in respect of all or any
part of the Collateral.
|
5.2.8
|
Litigation
|
There
are
no pending or, to the Actual Knowledge of WTC, threatened actions or proceedings
against WTC, in its individual capacity or as Mortgagee, a Pass Through Trustee
or Subordination Agent, before any court, administrative agency or tribunal
which, if determined adversely to WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
would materially adversely affect the ability of WTC, in its individual capacity
or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case
may
be, to perform its obligations under any of the Operative Agreements to which
Mortgagee is a party, the Pass Through Trustee Agreements or the Subordination
Agent Agreements.
|
5.2.9
|
Securities
Laws
|
Neither
WTC nor any person authorized to act on its behalf has directly or indirectly
offered any beneficial interest or Security relating to the ownership of any
Pledged Spare Part or any interest in the Collateral or any of the Equipment
Notes or any other interest in or Security under the Collateral for sale to,
or
solicited any offer to acquire any such interest or Security from, or has sold
any such interest or Security to, any Person other than the Subordination Agent
and the Pass Through Trustees, except for the offering and sale of the Pass
Through Certificates.
|
5.2.10
|
Investment
|
The
Equipment Notes to be acquired by the Subordination Agent are being acquired
by
it for the account of the Pass Through Trustees, for investment and not with
a
view to any resale or
distribution
thereof, except that, subject to the restrictions on transfer set forth in
Section 9, the disposition by it of its Equipment Notes shall at all times
be within its control.
|
5.2.11
|
Taxes
|
There
are
no Taxes payable by any Pass Through Trustee or WTC, as the case may be, imposed
by the State of Delaware or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by such
Pass
Through Trustee or WTC, as the case may be, of this Agreement or any of the
Pass
Through Trustee Agreements (other than franchise or other taxes based on or
measured by any fees or compensation received by any such Pass Through Trustee
or WTC, as the case may be, for services rendered in connection with the
transactions contemplated by any of the Pass Through Trust Agreements), and
there are no Taxes payable by any Pass Through Trustee or WTC, as the case
may
be, imposed by the State of Delaware or any political subdivision thereof in
connection with the acquisition, possession or ownership by any such Pass
Through Trustee of any of the Equipment Notes (other than franchise or other
taxes based on or measured by any fees or compensation received by any such
Pass
Through Trustee or WTC, as the case may be, for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust Agreements),
and, assuming that the trusts created by the Pass Through Trust Agreements
will
not be taxable as corporations, but, rather, each will be characterized as
a
grantor trust under subpart E, Part I of Subchapter J of the Code or as a
partnership under Subchapter K of the Code, such trusts will not be subject
to
any Taxes imposed by the State of Delaware or any political subdivision
thereof.
|
5.2.12
|
Broker’s
Fees
|
No
Person
acting on behalf of WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, as the case may be, is or will be
entitled to any broker’s fee, commission or finder’s fee in connection with the
Transactions.
|
COVENANTS,
UNDERTAKINGS AND
AGREEMENTS
|
|
Covenants
of Owner
|
Owner
covenants and agrees, at its own cost and expense, with each Note Holder and
Mortgagee as follows:
|
6.1.1
|
Corporate
Existence; U.S. Air
Carrier
|
Owner
shall at all times maintain its corporate existence, except as permitted by
Section 4.07 of the Trust Indenture, and shall at all times remain a U.S.
Air Carrier.
|
6.1.2
|
Notice
of Change of Location
|
Owner
will give Mortgagee timely written notice (but in any event within 30 days
prior
to the expiration of the period of time specified under applicable Law to
prevent lapse of perfection) of any change in its location (as such term is
used
in Section 9-307 of the UCC) or legal name and will promptly take any
action required by Section 4.06 of the Trust Indenture as a result of such
relocation.
|
6.1.3
|
Securities
Laws
|
Neither
Owner nor any person authorized to act on its behalf will directly or indirectly
offer any beneficial interest or Security relating to the ownership of any
Pledged Spare Part or any interest in any of the Equipment Notes or any other
interest in or Security under the Trust Indenture, for sale to, or solicit
any
offer to acquire any such interest or Security from, or sell any such interest
or Security to, any person in violation of the Securities Act or applicable
state or foreign securities Laws.
|
Covenants
of WTC
|
WTC
in
its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, covenants and agrees with Owner as
follows:
|
6.2.1
|
Liens
|
WTC
(a)
will not directly or indirectly create, incur, assume or suffer to exist any
Lien attributable to it on or with respect to all or any part of the Collateral
or any Pledged Spare Part, (b) will, at its own cost and expense, promptly
take such action as may be necessary to discharge any Lien attributable to
WTC
on all or any part of the Collateral or any Pledged Spare Part and (c) will
personally hold harmless and indemnify Owner, each Note Holder, each of their
respective Affiliates, successors and permitted assigns, and the Collateral
from
and against (i) any and all Expenses, (ii) any reduction in the amount
payable out of the Collateral, and (iii) any interference with the possession,
operation or other use of all or any part of any Pledged Spare Part, imposed
on,
incurred by or asserted against any of the foregoing as a consequence of any
such Lien.
|
6.2.2
|
Securities
Act
|
WTC
in
its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, will not offer any beneficial interest or Security relating to the
ownership of any Pledged Spare Part or any interest in the Collateral, or any
of
the Equipment Notes or any other interest in or Security under the Trust
Indenture for sale to, or solicit any offer to acquire any such interest or
Security from, or sell any such interest or Security to, any Person in violation
of the Securities Act or applicable state or foreign securities Laws, provided
that the foregoing shall not be deemed to impose on WTC any responsibility
with
respect to any such offer, sale or solicitation by any other party
hereto.
|
6.2.3
|
Performance
of Agreements
|
WTC,
in
its individual capacity and as Mortgagee, a Pass Through Trustee or
Subordination Agent, as the case may be, shall perform its obligations under
the
Pass Through Trustee Agreements and the Operative Agreements in accordance
with
the terms thereof.
|
6.2.4
|
Withholding
Taxes
|
WTC
shall
indemnify (on an after-tax basis) and hold harmless Owner against any United
States withholding taxes (and related interest, penalties and additions to
tax)
as a result of the
failure
by WTC to withhold on payments to any Note Holder if such Note Holder failed
to
provide to Mortgagee necessary certificates or forms to substantiate the right
to exemption from such withholding tax.
|
Covenants
of Note Holders
|
Each
Note
Holder (including Subordination Agent) as to itself only covenants and agrees
with Owner and Mortgagee as follows:
|
6.3.1
|
Withholding
Taxes
|
Such
Note
Holder (if it is a Non-U.S. Person) agrees to indemnify (on an after-tax basis)
and hold harmless Owner and Mortgagee against any United States withholding
taxes (and related interest, penalties and additions to tax) as a result of
the
inaccuracy or invalidity of any certificate or form provided by such Note Holder
to Mortgagee in connection with such withholding taxes. Any amount payable
hereunder shall be paid within 30 days after receipt by a Note Holder of a
written demand therefor.
|
6.3.2
|
Transfer;
Compliance
|
(a) Such
Note
Holder will (i) not transfer any Equipment Note or interest therein in violation
of the Securities Act or applicable state or foreign securities Law;
provided,
that
the foregoing provisions of this section shall not be deemed to impose on such
Note Holder any responsibility with respect to any such offer, sale or
solicitation by any other party hereto, and (ii) perform and comply with the
obligations specified to be imposed on it (as a Note Holder) under each of
the
Trust Indenture and the form of Equipment Note set forth in the Trust
Indenture.
(b) Each
Note
Holder will not sell, assign, convey, exchange or otherwise transfer any
Equipment Note or any interest in, or represented by, any Equipment Note (it
being understood that this provision is not applicable to the Pass Through
Certificates) unless the proposed transferee thereof first provides Owner with
both of the following:
(i) a
written
representation and covenant that either (a) no portion of the funds it uses
to
purchase, acquire and hold such Equipment Note or interest directly or
indirectly constitutes, or may be deemed under the Code or ERISA or any rulings,
regulations or court decisions thereunder to constitute, the assets of any
Plan
or (b) the transfer, and subsequent holding, of such Equipment Note or interest
shall not involve or give rise to a transaction that constitutes a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975(c)(1)
of
the Code involving Owner, a Pass Through Trustee, the Subordination Agent
or the
proposed transferee (other than a transaction that is exempted from the
prohibitions of such sections by applicable provisions of ERISA or the Code
or
administrative exemptions or regulations issued thereunder); and
(ii) a
written
covenant that it will not transfer any Equipment Note or any interest in,
or
represented by, any Equipment Note unless the subsequent transferee also
makes
the
representation described in clause (i) above and agrees to comply with this
clause (ii).
|
Agreements
|
|
6.4.1
|
Quiet
Enjoyment
|
Each
Pass
Through Trustee, Subordination Agent, each Note Holder and Mortgagee agrees
as
to itself with Owner that, so long as no Event of Default shall have occurred
and be continuing, such Person shall not (and shall not permit any Affiliate
or
other Person claiming by, through or under it to) interfere with Owner’s rights
in accordance with the Trust Indenture to the quiet enjoyment, possession and
use of the Collateral.
|
6.4.2
|
Consents
|
Each
Pass
Through Trustee, Subordination Agent and Mortgagee covenants and agrees, for
the
benefit of Owner, that it shall not unreasonably withhold its consent to any
consent or approval requested of it under the terms of any of the Operative
Agreements which by its terms is not to be unreasonably withheld.
|
6.4.3
|
Insurance
|
Each
Pass
Through Trustee, Subordination Agent, Mortgagee and each Note Holder agrees
not
to obtain or maintain insurance for its own account as permitted by
Section 4.09 of the Trust Indenture if such insurance would limit or
otherwise adversely affect the coverage of any insurance required to be obtained
or maintained by Owner pursuant to Section 4.09 of the Trust
Indenture.
|
6.4.4
|
Extent
of Interest of Note
Holders
|
A
Note
Holder shall not, as such, have any further interest in, or other right with
respect to, the Collateral when and if the principal and Premium, if any, of
and
interest on the Equipment Note held by such Holder, and all other sums, then
due
and payable to such Holder hereunder and under any other Operative Agreement,
shall have been paid in full.
|
CONFIDENTIALITY
|
Owner,
Note Holders and Mortgagee shall keep the Note Purchase Agreement and Annex
B to
the Trust Indenture confidential and shall not disclose, or cause to be
disclosed, the same to any Person, except (A) to prospective and permitted
transferees of Owner’s, a Note Holder’s, a Liquidity Provider’s, Policy
Provider’s, Mortgagee’s or other Indenture Indemnitee’s interest or their
respective counsel or special counsel, independent insurance brokers, auditors,
or other agents who agree to hold such information confidential, (B) to Owner’s,
a Note Holder’s, a Liquidity Provider’s, the Liquidity Guarantor’s, Policy
Provider’s, a Pass Through Trustee’s, Mortgagee’s or other Indenture
Indemnitee’s counsel or special counsel, independent insurance brokers,
auditors, or other agents, Affiliates or investors who agree to hold such
information confidential, (C) as may be required by any statute, court or
administrative order or decree, legal process or governmental ruling or
regulation, including those of any applicable insurance
regulatory
bodies (including, without limitation, the National Association of Insurance
Commissioners), federal or state banking examiners, Internal Revenue Service
auditors or any stock exchange, (D) with respect to a Note Holder or any
Pass Through Trustee, to a nationally recognized rating agency for the purpose
of obtaining or confirming a rating on the Equipment Notes or the Pass Through
Certificates or to support an NAIC rating for the Equipment Notes or
(E) such other Persons as are reasonably deemed necessary by the disclosing
party in order to protect the interests of such party or for the purposes of
enforcing such documents by such party; provided,
that
any and all disclosures permitted by clauses (C), (D), or (E) above shall
be made only to the extent necessary to meet the specific requirements or needs
of the Persons making such disclosures.
|
INDEMNIFICATION
AND EXPENSES
|
|
General
Indemnity
|
|
8.1.1
|
Indemnity
|
Whether
or not any of the transactions contemplated hereby are consummated, Owner shall
indemnify, protect, defend and hold harmless each Indemnitee from, against
and
in respect of, and shall pay on a net after-tax basis, any and all Expenses
of
any kind or nature whatsoever that may be imposed on, incurred by or asserted
against any Indemnitee, relating to, resulting from, or arising out of or in
connection with, any one or more of the following:
(a) The
Operative Agreements, the Pass Through Agreements, or the enforcement of any
of
the terms of any of the Operative Agreements or the Pass Through
Agreements;
(b) Any
Collateral, including, without limitation, with respect thereto, (i) the
manufacture, design, purchase, acceptance, nonacceptance or rejection,
ownership, delivery, nondelivery, lease, sublease, assignment, possession,
use
or non-use, operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage, airworthiness,
replacement, repair, sale, substitution, return, abandonment, redelivery or
other disposition of any Collateral by the Owner, any Permitted Lessee or any
other Person whatsoever, (ii) any claim or penalty arising out of or relating
to
violations of applicable Laws by Owner (or any Permitted Lessee), (iii) tort
liability, whether or not arising out of the negligence of any Indemnitee
(whether active, passive or imputed), (iv) death, personal injury, property
damage or any other loss or harm to passengers, shippers or others, (v)
environmental control, noise or pollution and (vi) any Liens in respect of
any
Collateral;
(c) The
offer, sale, or delivery of any Equipment Notes, Pass Through Certificates
or
any interest therein or represented thereby; and
(d) Any
breach of or failure to perform or observe, or any other noncompliance with,
any
covenant or agreement or other obligation to be performed by Owner under any
Operative Agreement to which it is party or any Pass Through Agreement or the
falsity of any representation or warranty of Owner in any Operative Agreement
to
which it is party or any Pass Through Agreement.
|
8.1.2
|
Exceptions
|
Notwithstanding
anything contained in Section 8.1.1, Owner shall not be required to
indemnify, protect, defend and hold harmless any Indemnitee pursuant to
Section 8.1.1 in respect of any Expense of such Indemnitee:
(a) For
any
Taxes or a loss of Tax benefit, whether or not Owner is required to indemnify
therefor pursuant to Section 8.3;
(b) Except
to
the extent attributable to acts or events occurring prior thereto, acts or
events (other than acts or events related to the performance by Owner of its
obligations pursuant to the terms of the Operative Agreements) that occur after
the Trust Indenture is required to be terminated in accordance with Section
11.01 of the Trust Indenture; provided,
that
nothing in this clause (b) shall be deemed to exclude or limit any claim that
any Indemnitee may have under applicable Law by reason of an Event of Default
or
for damages from Owner for breach of Owner’s covenants contained in the
Operative Agreements or to release Owner from any of its obligations under
the
Operative Agreements that expressly provide for performance after termination
of
the Trust Indenture;
(c) To
the
extent attributable to any Transfer (voluntary or involuntary) by or on behalf
of such Indemnitee of any Equipment Note or interest therein, except for
out-of-pocket costs and expenses incurred as a result of any such Transfer
pursuant to the exercise of remedies under any Operative Agreement;
(d) [Intentionally
Omitted.]
(e) To
the
extent attributable to the gross negligence or willful misconduct of such
Indemnitee or any related Indemnitee (as defined below) (other than gross
negligence or willful misconduct imputed to such person by reason of its
interest in the Collateral or any Operative Agreement);
(f) [Intentionally
Omitted.]
(g) To
the
extent attributable to the incorrectness or breach of any representation or
warranty of such Indemnitee or any related Indemnitee contained in or made
pursuant to any Operative Agreement or any Pass Through Agreement;
(h) To
the
extent attributable to the failure by such Indemnitee or any related Indemnitee
to perform or observe any agreement, covenant or condition on its part to be
performed or observed in any Operative Agreement or any Pass Through Agreement;
(i) To
the
extent attributable to the offer or sale by such Indemnitee or any related
Indemnitee of any interest in the Collateral, the Equipment Notes, the Pass
Through Certificates, or any similar interest, in violation of the Securities
Act or other applicable federal, state or foreign securities Laws (other than
any violation thereof caused by acts or omissions of Owner);
(j) (i) With
respect to any Indemnitee (other than Mortgagee), to the extent attributable
to
the failure of the Mortgagee to distribute funds received and distributable
by
it in
accordance
with the Trust Indenture, (ii) with respect to any Indemnitee (other than
the Subordination Agent), to the extent attributable to the failure of the
Subordination Agent to distribute funds received and distributable by it in
accordance with the Intercreditor Agreement, (iii) with respect to any
Indemnitee (other than the Pass Through Trustees), to the extent attributable
to
the failure of a Pass Through Trustee to distribute funds received and
distributable by it in accordance with the Pass Through Trust Agreements,
(iv) with respect to Mortgagee, to the extent attributable to the
negligence or willful misconduct of Mortgagee in the distribution of funds
received and distributable by it in accordance with the Trust Indenture,
(v) with respect to the Subordination Agent, to the extent attributable to
the negligence or willful misconduct of the Subordination Agent in the
distribution of funds received and distributable by it in accordance with the
Intercreditor Agreement, and (vi) with respect to the Pass Through
Trustees, to the extent attributable to the negligence or willful misconduct
of
a Pass Through Trustee in the distribution of funds received and distributable
by it in accordance with the Pass Through Trust Agreements;
(k) Other
than during the continuation of an Event of Default, to the extent attributable
to the authorization or giving or withholding of any future amendments,
supplements, waivers or consents with respect to any Operative Agreement or
Pass
Through Agreement other than such as have been requested by Owner or as are
required by or made pursuant to the terms of the Operative Agreements or Pass
Through Agreements (unless such requirement results from the actions of an
Indemnitee not required by or made pursuant to the Operative Agreements or
the
Pass Through Agreements);
(l) To
the
extent attributable to any amount which any Indemnitee expressly agrees to
pay
or such Indemnitee expressly agrees shall not be paid by or be reimbursed by
Owner;
(m) To
the
extent that it is an ordinary and usual operating or overhead
expense;
(n) [Intentionally
Omitted.]
(o) For
any
Lien attributable to such Indemnitee or any related Indemnitee;
(p) If
another provision of an Operative Agreement or a Pass Through Agreement
specifies the extent of Owner’s responsibility or obligation with respect to
such Expense, to the extent arising from other than failure of Owner to comply
with such specified responsibility or obligation; or
(q) To
the
extent incurred by or asserted against an Indemnitee as a result of any
“prohibited transaction,” within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code.
For
purposes of this Section 8.1, a Person shall be considered a “related”
Indemnitee with respect to an Indemnitee if such Person is an Affiliate or
employer of such Indemnitee, a director, officer, employee, agent, or servant
of
such Indemnitee or any such Affiliate or a successor or permitted assignee
of
any of the foregoing.
|
8.1.3
|
Separate
Agreement
|
This
Agreement constitutes a separate agreement with respect to each Indemnitee
and
is enforceable directly by each such Indemnitee.
|
8.1.4
|
Notice
|
If
a
claim for any Expense that an Indemnitee shall be indemnified against under
this
Section 8.1 is made, such Indemnitee shall give prompt written notice
thereof to Owner. Notwithstanding the foregoing, the failure of any Indemnitee
to notify Owner as provided in this Section 8.1.4, or in Section 8.1.5,
shall not release Owner from any of its obligations to indemnify such Indemnitee
hereunder, except to the extent that such failure results in an additional
Expense to Owner (in which event Owner shall not be responsible for such
additional expense) or materially impairs Owner’s ability to contest such
claim.
|
8.1.5
|
Notice
of Proceedings; Defense of Claims;
Limitations
|
(a) In
case
any action, suit or proceeding shall be brought against any Indemnitee for
which
Owner is responsible under this Section 8.1, such Indemnitee shall notify
Owner of the commencement thereof and Owner may, at its sole cost and expense,
participate in and to the extent that it shall wish (subject to the provisions
of the following paragraph), assume and control the defense thereof and, subject
to Section 8.1.5(c), settle or compromise the same.
(b) Owner
or
its insurer(s) shall have the right, at its or their expense, to investigate
or,
if Owner or its insurer(s) shall agree not to dispute liability to the
Indemnitee giving notice of such action, suit or proceeding under this
Section 8.1.5 for indemnification hereunder or under any insurance policies
pursuant to which coverage is sought, control (using counsel reasonably
satisfactory to the respective Indemnitee) the defense of, any action, suit
or
proceeding, relating to any Expense for which indemnification is sought pursuant
to this Section 8.1, and each Indemnitee shall cooperate with Owner or its
insurer(s) with respect thereto; provided,
that
Owner shall not be entitled to control the defense of any such action, suit,
proceeding or compromise any such Expense (x) during the continuance of any
Event of Default, (y) if such proceedings will involve a material risk of
the sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Lien) on any of the Collateral, unless Owner shall have posted a
bond
or other security reasonably satisfactory to the relevant Indemnitee with
respect to such risk or (z) if such proceedings could entail any risk of
criminal liability being imposed on such Indemnitee. In connection with any
such
action, suit or proceeding being controlled by Owner, such Indemnitee shall
have
the right to participate therein, at its sole cost and expense, with its own
counsel reasonably satisfactory to Owner.
(c) In
no
event shall any Indemnitee enter into a settlement or other compromise with
respect to any Expense without the prior written consent of Owner, which consent
shall not be unreasonably withheld or delayed, unless such Indemnitee waives
its
right to be indemnified with respect to such Expense under this Section
8.1.
(d) In
the
case of any Expense indemnified by the Owner hereunder which is covered by
a
policy of insurance maintained by Owner pursuant to Section 4.09 of the
Indenture, at Owner’s expense, each Indemnitee agrees to cooperate with the
insurers in the exercise of their
rights
to
investigate, defend or compromise such Expense as may be required to retain
the
benefits of such insurance with respect to such Expense.
(e) If
an
Indemnitee is not a party to this Agreement, Owner may require such Indemnitee
to agree in writing to the terms of this Section 8 and Section 12.8
prior to making any payment to such Indemnitee under this
Section 8.
(f) Nothing
contained in this Section 8.1.5 shall be deemed to require an Indemnitee to
contest any Expense or to assume responsibility for or control of any judicial
proceeding with respect thereto.
|
8.1.6
|
Information
|
Owner
will provide the relevant Indemnitee with such information not within the
control of such Indemnitee, as is in Owner’s control or is reasonably available
to Owner, which such Indemnitee may reasonably request and will otherwise
cooperate with such Indemnitee so as to enable such Indemnitee to fulfill its
obligations under Section 8.1.5. The Indemnitee shall supply Owner with
such information not within the control of Owner, as is in such Indemnitee’s
control or is reasonably available to such Indemnitee, which Owner may
reasonably request to control or participate in any proceeding to the extent
permitted by Section 8.1.5.
|
8.1.7
|
Effect
of Other Indemnities; Subrogation; Further
Assurances
|
Upon
the
payment in full by Owner of any indemnity provided for under this Agreement,
Owner, without any further action and to the full extent permitted by Law,
will
be subrogated to all rights and remedies of the person indemnified (other than
with respect to any of such Indemnitee’s insurance policies or in connection
with any indemnity claim such Indemnitee may have under Section 6.03 or
8.01 of the Trust Indenture) in respect of the matter as to which such indemnity
was paid. Each Indemnitee will give such further assurances or agreements and
cooperate with Owner to permit Owner to pursue such claims, if any, to the
extent reasonably requested by Owner and at Owner’s expense.
|
8.1.8
|
Refunds
|
If
an
Indemnitee receives any refund, in whole or in part, with respect to any Expense
paid by Owner hereunder, it will promptly pay the amount refunded (but not
an
amount in excess of the amount Owner or any of its insurers has paid in respect
of such Expense) over to Owner unless an Event of Default shall have occurred
and be continuing, in which case such amounts shall be paid over to Mortgagee
to
hold as security for Owner’s obligations under the Operative Agreements or, if
requested by Owner, applied to satisfy such obligations.
|
Expenses
|
|
8.2.1
|
Invoices
and Payment
|
The
Mortgagee shall promptly submit to Owner for its prompt approval (which shall
not be unreasonably withheld) copies of invoices in reasonable detail of the
Transaction Expenses
for
which
it is responsible for providing information as they are received (but in no
event later than the 90th day after the Closing Date). If so submitted and
approved, the Owner agrees promptly, but in any event no later than the 105th
day after the Closing Date, to pay Transaction Expenses.
|
8.2.2
|
Payment
of Other Expenses
|
Owner
shall pay (i) the ongoing fees and expenses of Mortgagee, and (ii) all
reasonable out-of-pocket costs and expenses (including the reasonable fees
and
disbursements of counsel) incurred by Mortgagee or any Note Holder attributable
to any waiver, amendment or modification of any Operative Agreement to the
extent requested by Owner.
|
General
Tax Indemnity
|
|
8.3.1
|
General
|
Except
as
provided in Section 8.3.2, Owner agrees that each payment paid by Owner under
the Equipment Notes, and any other payment or indemnity paid by Owner to a
Tax
Indemnitee under any Operative Agreement, shall be free of all withholdings
or
deductions with respect to Taxes of any nature (other than U.S. federal, state
or local withholding taxes on, based on or measured by gross or net income),
and
in the event that Owner shall be required by applicable law to make any such
withholding or deduction for any such payment (x) Owner shall make all such
withholdings or deductions, (y) the amount payable by Owner shall be increased
so that after making all required withholdings or deductions such Tax Indemnitee
receives the same amount that it would have received had no such withholdings
or
deductions been made, and (z) Owner shall pay the full amount withheld or
deducted to the relevant Taxing Authority in accordance with applicable law.
Except as provided in Section 8.3.2 and whether or not any of the transactions
contemplated hereby are consummated, Owner shall pay, indemnify, protect, defend
and hold each Tax Indemnitee harmless from all Taxes imposed by any Taxing
Authority that may from time to time be imposed on or asserted against any
Tax
Indemnitee or any Pledged Spare Part, or any interest therein (whether or not
indemnified against by any other Person), upon or with respect to the Operative
Agreements or the transactions or payments contemplated thereby, including
but
not limited to any Tax imposed upon or with respect to (x) any Pledged
Spare Part, any Operative Agreement (including without limitation any Equipment
Notes) or any data or any other thing delivered or to be delivered under an
Operative Agreement, (y) the purchase, manufacture, acceptance, rejection,
sale,
transfer of title, return, ownership, mortgaging, delivery, transport, charter,
rental, lease, re-lease, sublease, assignment, possession, repossession,
presence, use, condition, storage, preparation, maintenance, modification,
alteration, improvement, operation, registration, transfer or change of
registration, reregistration, repair, replacement, overhaul, location, control,
the imposition of any Lien, financing, refinancing requested by the Owner,
abandonment or other disposition of any Pledged Spare Part, any data or any
other thing delivered or to be delivered under an Operative Agreement or (z)
interest, fees or any other income, proceeds, receipts or earnings, whether
actual or deemed, arising upon, in connection with, or in respect of, any of
the
Operative Agreements (including the property or income or other proceeds with
respect to property held as part of the Collateral) or the transactions
contemplated thereby.
|
8.3.2
|
Certain
Exceptions
|
The
provisions of Section 8.3.1 shall not apply to, and Owner shall have no
liability hereunder for, Taxes:
(a) imposed
on a Tax Indemnitee by the federal government of the United States or any Taxing
Authority or governmental subdivision of the United States or therein (including
any state or local Taxing Authority) (i) on, based on, or measured by, gross
or
net income or gross or net receipts, including capital gains taxes, excess
profits taxes, minimum taxes from tax preferences, alternative minimum taxes,
branch profits taxes, accumulated earnings taxes, personal holding company
taxes, succession taxes and estate taxes, and any withholding taxes on, based
on
or measured by gross or net income or receipts or (ii) on, or with respect
to,
or measured by, capital or net worth or in the nature of a franchise tax or
a
tax for the privilege of doing business (other than, in the case of clause
(i)
or (ii), sales, use, license or property Taxes);
(b) imposed
on a Tax Indemnitee by any Taxing Authority or governmental subdivision thereof
or therein outside of the United States (including any Taxing Authority in
or of
a territory, possession or commonwealth of the United States) (i) on, based
on,
or measured by, gross or net income or gross or net receipts, including capital
gains taxes, excess profits taxes, minimum taxes from tax preferences,
alternative minimum taxes, branch profits taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes and estate taxes, and any
withholding taxes on, based on or measured by gross or net income or receipts
or
(ii) on, or with respect to, or measured by, capital or net worth or in the
nature of a franchise tax or a tax for the privilege of doing business (other
than, in the case of clause (i) or (ii), (A) sales, use, license or property
Taxes, or (B) any Taxes imposed by any Taxing Authority (other than a Taxing
Authority within whose jurisdiction such Tax Indemnitee is incorporated or
organized or maintains its principal place of business) if such Tax Indemnitee
would not have been subject to Taxes of such type by such jurisdiction but
for
(I) the location, use or operation of any Pledged Spare Part thereof by an
Owner
Person within the jurisdiction of the Taxing Authority imposing such Tax, or
(II) the activities of any Owner Person in such jurisdiction, including, but
not
limited to, use of any aircraft by Owner in such jurisdiction, (III) the status
of any Owner Person as a foreign entity or as an entity owned in whole or in
part by foreign persons, (IV) Owner having made (or having been deemed to have
made) payments to such Tax Indemnitee from the relevant jurisdiction or (V)
in
the case of the Pass Through Trustees, the Note Holders or any related Tax
Indemnitee, the Owner being incorporated or organized or maintaining a place
of
business or conducting activities in such jurisdiction);
(c) on,
or
with respect to, or measured by, any trustee fees, commissions or compensation
received by the Pass Through Trustee, Subordination Agent or
Mortgagee;
(d) that
are
being contested as provided in Section 8.3.4 hereof;
(e) imposed
on any Tax Indemnitee to the extent that such Taxes result from the gross
negligence or willful misconduct of such Tax Indemnitee or any Affiliate
thereof;
(f) imposed
on or with respect to a Tax Indemnitee (including the transferee in those cases
in which the Tax on transfer is imposed on, or is collected from, the
transferee) as a result
of
a
transfer or other disposition (including a deemed transfer or disposition)
by
such Tax Indemnitee or a related Tax Indemnitee of any interest in any Pledged
Spare Part, any interest arising under the Operative Agreements or any Equipment
Note or as a result of a transfer or disposition (including a deemed transfer
or
disposition) of any interest in a Tax Indemnitee (other than (A) a substitution
or replacement of any Pledged Spare Part by an Owner Person that is treated
for
Tax purposes as a transfer or disposition, or (B) a transfer pursuant to an
exercise of remedies upon an Event of Default that shall have occurred and
have
been continuing);
(g) Taxes
in
excess of those that would have been imposed had there not been a transfer
or
other disposition by or to such Tax Indemnitee or a related Tax Indemnitee
described in paragraph (f) above;
(h) consisting
of any interest, penalties or additions to tax imposed on a Tax Indemnitee
as a
result of (in whole or in part) failure of such Tax Indemnitee or a related
Tax
Indemnitee to file any return properly and timely, unless such failure shall
be
caused by the failure of Owner to fulfill its obligations, if any, under Section
8.3.6 with respect to such return;
(i) resulting
from, or that would not have been imposed but for, any Liens arising as a result
of claims against, or acts or omissions of, or otherwise attributable to such
Tax Indemnitee or a related Tax Indemnitee that the Owner is not obligated
to
discharge under the Operative Agreements;
(j) imposed
on any Tax Indemnitee as a result of the breach by such Tax Indemnitee or a
related Tax Indemnitee of any covenant of such Tax Indemnitee or any Affiliate
thereof contained in any Operative Agreement or the inaccuracy of any
representation or warranty by such Tax Indemnitee or any Affiliate thereof
in
any Operative Agreement;
(k) in
the
nature of an intangible or similar Tax (i) upon or with respect to the value
or
principal amount of the interest of any Note Holder in any Equipment Note or
the
loan evidenced thereby but only if such Taxes are in the nature of franchise
Taxes or result from the Tax Indemnitee doing business in the taxing
jurisdiction and are imposed because of the place of incorporation or the
activities unrelated to the transactions contemplated by the Operative
Agreements in the taxing jurisdiction of such Tax Indemnitee;
(l) imposed
on a Tax Indemnitee by a Taxing Authority of a jurisdiction outside the United
States to the extent that such Taxes would not have been imposed but for a
connection between the Tax Indemnitee or a related Tax Indemnitee and such
jurisdiction imposing such Tax unrelated to the transactions contemplated by
the
Operative Agreements; or
(m) Taxes
relating to ERISA or Section 4975 of the Code.
For
purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that are
successors, assigns, agents, servants or Affiliates of such Tax Indemnitee
shall
be related Tax Indemnitees.
|
8.3.3
|
Payment
|
(a) Owner’s
indemnity obligation to a Tax Indemnitee under this Section 8.3 shall equal
the
amount which, after taking into account any Tax imposed upon the receipt or
accrual of the amounts payable under this Section 8.3 and any tax benefits
actually recognized by such Tax Indemnitee as a result of the indemnifiable
Tax
(including, without limitation, any benefits recognized as a result of an
indemnifiable Tax being utilized by such Tax Indemnitee as a credit against
Taxes not indemnifiable under this Section 8.3), shall equal the amount of
the
Tax indemnifiable under this Section 8.3.
(b) At
Owner’s request, the computation of the amount of any indemnity payment owed by
Owner or any amount owed by a Tax Indemnitee to Owner pursuant to this Section
8.3 shall be verified and certified by an independent public accounting firm
selected by such Tax Indemnitee and reasonably satisfactory to Owner. Such
verification shall be binding. The costs of such verification (including the
fee
of such public accounting firm) shall be borne by Owner unless such verification
shall result in an adjustment in Owner’s favor of 5% or more of the net present
value of the payment as computed by such Tax Indemnitee, in which case the
costs
shall be paid by such Tax Indemnitee.
(c) Each
Tax
Indemnitee shall provide Owner with such certifications, information and
documentation as shall be in such Tax Indemnitee’s possession and as shall be
reasonably requested by Owner to minimize any indemnity payment pursuant to
this
Section 8.3; provided, that notwithstanding anything to the contrary contained
herein, no Tax Indemnitee shall be required to provide Owner with any Tax
returns.
(d) Each
Tax
Indemnitee shall promptly forward to Owner any written notice, ▇▇▇▇ or advice
received by it from any Taxing Authority concerning any Tax for which it seeks
indemnification under this Section 8.3. Owner shall pay any amount for which
it
is liable pursuant to this Section 8.3 directly to the appropriate Taxing
Authority if legally permissible or upon demand of a Tax Indemnitee, to such
Tax
Indemnitee within 30 days of such demand (or, if a contest occurs in accordance
with Section 8.3.4, within 30 days after a Final Determination (as defined
below)), but in no event more than one Business Day prior to the date the Tax
to
which such amount payable hereunder relates is due. If requested by a Tax
Indemnitee in writing, Owner shall furnish to the appropriate Tax Indemnitee
the
original or a certified copy of a receipt for Owner’s payment of any Tax paid by
Owner or such other evidence of payment of such Tax as is acceptable to such
Tax
Indemnitee. Owner shall also furnish promptly upon written request such data
as
any Tax Indemnitee may reasonably require to enable such Tax Indemnitee to
comply with the requirements of any taxing jurisdiction unless such data is
not
reasonably available to Owner or, unless such data is specifically requested
by
a Taxing Authority, is not customarily furnished by domestic air carriers under
similar circumstances. For purposes of this Section 8.3, a “Final Determination”
shall mean (i) a decision, judgment, decree or other order by any court of
competent jurisdiction that occurs pursuant to the provisions of Section 8.3.4,
which decision, judgment, decree or other order has become final and
unappealable, (ii) a closing agreement or settlement agreement entered into
in
accordance with Section 8.3.4 that has become binding and is not subject to
further review or appeal (absent fraud, misrepresentation, etc.), or (iii)
the
termination of administrative proceedings and the expiration of the time for
instituting a claim in a court proceeding.
(e) If
any
Tax Indemnitee shall actually realize a tax savings by reason of any Tax paid
or
indemnified by Owner pursuant to this Section 8.3 (whether such tax savings
shall be by means of a foreign tax credit, depreciation or cost recovery
deduction or otherwise) and such savings is not otherwise taken into account
in
computing such payment or indemnity such Tax Indemnitee shall pay to Owner
an
amount equal to the lesser of (i) the amount of such tax savings, plus any
additional tax savings recognized as the result of any payment made pursuant
to
this sentence, when, as, if, and to the extent, realized or (ii) the amount
of
all payments pursuant to this Section 8.3 by Owner to such Tax Indemnitee (less
any payments previously made by such Tax Indemnitee to Owner pursuant to this
Section 8.3.3 (e)) (and the excess, if any, of the amount described in clause
(i) over the amount described in clause (ii) shall be carried forward and
applied to reduce pro tanto any subsequent obligations of Owner to make payments
to such Tax Indemnitee pursuant to this Section 8.3); provided, that such Tax
Indemnitee shall not be required to make any payment pursuant to this sentence
so long as an Event of Default of a monetary nature has occurred and is
continuing. If a tax benefit is later disallowed or denied, the disallowance
or
denial shall be treated as a Tax indemnifiable under Section 8.3.1 without
regard to the provisions of Section 8.3.2 (other than Section 8.3.2 (f)). Each
such Tax Indemnitee shall in good faith use reasonable efforts in filing its
tax
returns and in dealing with Taxing Authorities to seek and claim any such tax
benefit.
|
8.3.4
|
Contest
|
(a) If
a
written claim is made against a Tax Indemnitee for Taxes with respect to which
Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee
makes a determination that a Tax is due for which Owner could have an indemnity
obligation hereunder, such Tax Indemnitee shall promptly give Owner notice
in
writing of such claim (provided, that failure to so notify Owner shall not
relieve Owner of its indemnity obligations hereunder unless such failure to
notify effectively forecloses Owner’s rights to require a contest of such claim)
and shall take no action with respect to such claim without the prior written
consent of Owner for 30 days following the receipt of such notice by Owner;
provided, that, in the case of a claim made against a Tax Indemnitee, if such
Tax Indemnitee shall be required by law to take action prior to the end of
such
30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform
Owner, and such Tax Indemnitee shall take no action for as long as it is legally
able to do so (it being understood that a Tax Indemnitee shall be entitled
to
pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period
if (i)(A) the failure to so pay the Tax would result in substantial penalties
(unless immediately reimbursed by Owner) and the act of paying the Tax would
not
materially prejudice the right to contest or (B) the failure to so pay would
result in criminal penalties and (ii) such Tax Indemnitee shall take any action
so required in connection with so paying the Tax in a manner that is the least
prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee
shall (provided, that Owner shall have agreed to keep such information
confidential other than to the extent necessary in order to contest the claim)
furnish Owner with copies of any requests for information from any Taxing
Authority relating to such Taxes with respect to which Owner may be required
to
indemnify hereunder. If requested by Owner in writing within 30 days after
its
receipt of such notice, such Tax Indemnitee shall, at the expense of Owner
(including, without limitation, all reasonable costs, expenses and reasonable
attorneys’ and accountants’ fees and disbursements), in good faith contest (or,
if permitted by applicable law, allow Owner to contest) through appropriate
administrative and judicial proceedings the validity, applicability or amount
of
such Taxes by (I)
resisting
payment thereof, (II) not paying the same except under protest if protest is
necessary and proper or (III) if the payment is made, using reasonable efforts
to obtain a refund thereof in an appropriate administrative and/or judicial
proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal
any
adverse administrative or judicial decision, except that the Tax Indemnitee
shall not be required to pursue any appeals to the United States Supreme Court.
If and to the extent the Tax Indemnitee is able to separate the contested issue
or issues from other issues arising in the same administrative or judicial
proceeding that are unrelated to the transactions contemplated by the Operative
Agreements without, in the good faith judgment of such Tax Indemnitee, adversely
affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control
the conduct of any such proceeding and shall provide to Owner (at Owner’s cost
and expense) with such information or data that is in such Tax Indemnitee’s
control or possession that is reasonably necessary to conduct such contest.
In
the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall
consult with Owner in good faith regarding the manner of contesting such claim
and shall keep Owner reasonably informed regarding the progress of such contest.
A Tax Indemnitee shall not fail to take any action expressly required by this
Section 8.3.4 (including, without limitation, any action regarding any appeal
of
an adverse determination with respect to any claim) or settle or compromise
any
claim without the prior written consent of the Owner (except as contemplated
by
Section 8.3.4(b) or (c)).
(b) Notwithstanding
the foregoing, in no event shall a Tax Indemnitee be required to pursue any
contest (or to permit Owner to pursue any contest) unless (i) Owner shall have
agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses
incurred by such Tax Indemnitee in connection with contesting such Taxes,
including, without limitation, all reasonable out of pocket costs and expenses
and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such
contest shall involve the payment of the claim, Owner shall advance the amount
thereof (to the extent indemnified hereunder) plus interest, penalties and
additions to tax with respect thereto that are required to be paid prior to
the
commencement of such contest on an interest-free after-Tax basis to such Tax
Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net
realized tax benefits resulting from such advance including any tax benefits
resulting from making such payment), (iii) such Tax Indemnitee shall have
reasonably determined that the action to be taken will not result in any
material risk of forfeiture, sale or loss of any Pledged Spare Part (unless
Owner shall have made provisions to protect the interests of any such Tax
Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee)
(provided, that such Tax Indemnitee agrees to notify Owner in writing promptly
after it becomes aware of any such risk), (iv) no Event of Default shall have
occurred and be continuing unless Owner has provided security for its
obligations hereunder by advancing to such Tax Indemnitee before proceeding
or
continuing with such contest, the amount of the Tax being contested, plus any
interest and penalties and an amount estimated in good faith by such Tax
Indemnitee for expenses, and (v) prior to commencing any judicial action
controlled by Owner, Owner shall have acknowledged its liability for such claim
hereunder, provided that Owner shall not be bound by its acknowledgment if
the
Final Determination articulates conclusions of law and fact that demonstrate
that Owner has no liability for the contested amounts hereunder. Notwithstanding
the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle
any claim which may be indemnifiable by Owner pursuant to this Section 8.3
without the written permission of Owner, Owner’s obligation to indemnify such
Tax Indemnitee with respect to such claim (and all directly related claims
and
claims based on the
outcome
of such claim) shall terminate, subject to Section 8.3.4(c), and subject to
Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously
paid or advanced to such Tax Indemnitee with respect to such claim, plus
interest at the rate that would have been payable by the relevant Taxing
Authority with respect to a refund of such Tax.
(c) Notwithstanding
anything contained in this Section 8.3, a Tax Indemnitee will not be required
to
contest the imposition of any Tax and shall be permitted to settle or compromise
any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its
right to indemnity under this Section 8.3 with respect to such Tax (and any
directly related claim and any claim the outcome of which is determined based
upon the outcome of such claim), (ii) shall pay to Owner any amount previously
paid or advanced by Owner pursuant to this Section 8.3 with respect to such
Tax,
plus interest at the rate that would have been payable by the relevant Taxing
Authority with respect to a refund of such Tax, and (iii) shall agree to discuss
with Owner the views or positions of any relevant Taxing Authority with respect
to the imposition of such Tax.
|
8.3.5
|
Refund
|
If
any
Tax Indemnitee shall receive a refund of, or be entitled to a credit against
other liability for, all or any part of any Taxes paid, reimbursed or advanced
by Owner, such Tax Indemnitee shall pay to Owner within 30 days of such receipt
an amount equal to the lesser of (a) the amount of such refund or credit plus
any net tax benefit (taking into account any Taxes incurred by such Tax
Indemnitee by reason of the receipt of such refund or realization of such
credit) actually realized by such Tax Indemnitee as a result of any payment
by
such Tax Indemnitee made pursuant to this sentence (including this clause (a))
and (b) such tax payment, reimbursement or advance by Owner to such Tax
Indemnitee theretofore made pursuant to this Section 8.3 (and the excess, if
any, of the amount described in clause (a) over the amount described in clause
(b) shall be carried forward and applied to reduce pro tanto any subsequent
obligation of Owner to make payments to such Tax Indemnitee pursuant to this
Section 8.3). If, in addition to such refund or credit, such Tax Indemnitee
shall receive (or be credited with) an amount representing interest on the
amount of such refund or credit, such Tax Indemnitee shall pay to Owner within
30 days of such receipt or realization of such credit that proportion of such
interest that shall be fairly attributable to Taxes paid, reimbursed or advanced
by Owner prior to the receipt of such refund or realization of such
credit.
|
8.3.6
|
Tax
Filing
|
If
any
report, return or statement is required to be filed with respect to any Tax
which is subject to indemnification under this Section 8.3, Owner shall timely
file the same (except for any such report, return or statement which a Tax
Indemnitee has timely notified the Owner in writing that such Tax Indemnitee
intends to file, or for which such Tax Indemnitee is required by law to file,
in
its own name); provided, that the relevant Tax Indemnitee shall furnish Owner
with any information in such Tax Indemnitee’s possession or control that is
reasonably necessary to file any such return, report or statement and is
reasonably requested in writing by Owner (it being understood that the Tax
Indemnitee shall not be required to furnish copies of its actual tax returns,
although it may be required to furnish relevant information contained therein).
Owner shall either file such report, return or statement and send a copy of
such
report, return or statement to such Tax Indemnitee, or, where Owner is not
permitted to file such report, return or
statement,
it shall notify such Tax Indemnitee of such requirement and prepare and deliver
such report, return or statement to such Tax Indemnitee in a manner satisfactory
to such Tax Indemnitee within a reasonable time prior to the time such report,
return or statement is to be filed.
|
8.3.7
|
Forms
|
Each
Tax
Indemnitee agrees to furnish from time to time to Owner or Mortgagee or to
such
other person as Owner or Mortgagee may designate, at Owner’s or Mortgagee’s
request, such duly executed and properly completed forms as may be necessary
or
appropriate in order to claim any reduction of or exemption from any withholding
or other Tax imposed by any Taxing Authority, if (x) such reduction or exemption
is available to such Tax Indemnitee and (y) Owner has provided such Tax
Indemnitee with any information necessary to complete such form not otherwise
reasonably available to such Tax Indemnitee.
|
8.3.8
|
Non-Parties
|
If
a Tax
Indemnitee is not a party to this Agreement, Owner may require the Tax
Indemnitee to agree in writing, in a form reasonably acceptable to Owner, to
the
terms of this Section 8.3 and Section 12.8 prior to making any payment to such
Tax Indemnitee under this Section 8.3.
|
8.3.9
|
Subrogation
|
Upon
payment of any Tax by Owner pursuant to this Section 8.3 to or on behalf of
a
Tax Indemnitee, Owner, without any further action, shall be subrogated to any
claims that such Tax Indemnitee may have relating thereto. Such Tax Indemnitee
shall cooperate with Owner (to the extent such cooperation does not result
in
any unreimbursed cost, expense or liability to such Tax Indemnitee) to permit
Owner to pursue such claims.
|
Payments
|
Any
payments made pursuant to Section 8.1 or 8.3 shall be due on the 30th day
after demand therefor and shall be made directly to the relevant Indemnitee
or
Tax Indemnitee or to Owner, in immediately available funds at such bank or
to
such account as specified by such Indemnitee or Tax Indemnitee or Owner, as
the
case may be, in written directives to the payor, or, if no such direction shall
have been given, by check of the payor payable to the order of, and mailed
to,
such Indemnitee or Tax Indemnitee or Owner, as the case may be, by certified
mail, postage prepaid, at its address as set forth in this
Agreement.
|
Interest
|
If
any
amount payable by Owner, any Indemnitee or any Tax Indemnitee under
Section 8.1 or 8.3 is not paid when due, the person obligated to make such
payment shall pay on demand, to the extent permitted by Law, to the person
entitled thereto, interest on any such amount for the period from and including
the due date for such amount to but excluding the date the same is paid, at
the
Payment Due Rate. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
|
Benefit
of Indemnities
|
The
obligations of Owner in respect of all indemnities, obligations, adjustments
and
payments in Section 8.1 or 8.3 are expressly made for the benefit of, and
shall be enforceable by, the Indemnitee or Tax Indemnitee entitled thereto,
notwithstanding any provision of the Trust Indenture.
|
ASSIGNMENT
OR TRANSFER OF INTEREST
|
|
Note
Holders
|
Subject
to Section 6.3.2 hereof and Section 2.07 of the Trust Indenture, any Note
Holder may, at any time and from time to time, Transfer or grant participations
in all or any portion of the Equipment Notes and/or all or any portion of its
beneficial interest in its Equipment Notes to any person (it being understood
that the sale or issuance of Pass Through Certificates by a Pass Through Trustee
shall not be considered a Transfer or participation); provided,
that
any participant in any such participations shall not have any direct rights
under the Operative Agreements or any Lien on all or any part of the Collateral
and Owner shall not have any increased liability or obligations as a result
of
any such participation. In the case of any such Transfer, the Transferee, by
acceptance of Equipment Notes in connection with such Transfer, shall be deemed
to be bound by all of the covenants of Note Holders contained in the Operative
Agreements.
|
Effect
of Transfer
|
Upon
any
Transfer in accordance with Section 9.1 (other than any Transfer by any
Note Holder, to the extent it grants only participations in Equipment Notes
or
in its beneficial interest therein), Transferee shall be deemed a “Note Holder,”
for all purposes of this Agreement and the other Operative Agreements, and
the
transferring Note Holder shall be released from all of its liabilities and
obligations under this Agreement and any other Operative Agreements to the
extent such liabilities and obligations arise after such Transfer and, in each
case, to the extent such liabilities and obligations are assumed by the
Transferee; provided,
that
such transferring Note Holder (and its respective Affiliates, successors,
assigns, agents, servants, representatives, directors and officers) will
continue to have the benefit of any rights or indemnities under any Operative
Agreement vested or relating to circumstances, conditions, acts or events prior
to such Transfer.
|
SECTION
1110
|
It
is the
intention of each of the Owner, the Note Holders (such intention being evidenced
by each of their acceptance of an Equipment Note), and Mortgagee that Mortgagee
shall be entitled to the benefits of Section 1110 in the event of a case
under Chapter 11 of the Bankruptcy Code in which Owner is a
debtor.
|
CHANGE
OF CITIZENSHIP
|
|
Generally
|
Without
prejudice to the representations, warranties or covenants regarding the status
of any party hereto as a Citizen of the United States, each of Owner, WTC and
Mortgagee agrees that it will, immediately upon obtaining knowledge of any
facts
that would cast doubt upon its continuing status as a Citizen of the United
States and promptly upon public disclosure of negotiations in respect of any
transaction which would or might adversely affect such status, notify in writing
all parties hereto of all relevant matters in connection therewith.
|
Mortgagee
|
Upon
WTC
giving any notice in accordance with Section 11.1, Mortgagee shall (if and
so long as such citizenship is necessary under the Act as in effect at such
time
or, if it is not necessary, if and so long as Mortgagee’s citizenship could have
any adverse effect on Owner, or any Note Holder), subject to Section 9.02
of the Trust Indenture, resign as Mortgagee promptly upon its ceasing to be
such
a citizen.
|
MISCELLANEOUS
|
|
Amendments
|
No
provision of this Agreement may be amended, supplemented, waived, modified,
discharged, terminated or otherwise varied orally, but only by an instrument
in
writing that specifically identifies the provision of this Agreement that it
purports to amend, supplement, waive, modify, discharge, terminate or otherwise
vary and is signed by the party against which the enforcement of the amendment,
supplement, waiver, modification, discharge, termination or variance is sought.
Each such amendment, supplement, waiver, modification, discharge, termination
or
variance shall be effective only in the specific instance and for the specific
purpose for which it is given. No provision of this Agreement shall be varied
or
contradicted by oral communication, course of dealing or performance or other
manner not set forth in an agreement, document or instrument in writing and
signed by the party against which enforcement of the same is
sought.
|
Severability
|
If
any
provision hereof shall be held invalid, illegal or unenforceable in any respect
in any jurisdiction, then, to the extent permitted by Law, (a) all other
provisions hereof shall remain in full force and effect in such jurisdiction
and
(b) such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction. If, however, any Law pursuant to which such provisions are held
invalid, illegal or unenforceable may be waived, such Law is hereby waived
by
the parties hereto to the full extent permitted, to the end that this Agreement
shall be deemed to be a valid and binding agreement in all respects, enforceable
in accordance with its terms.
|
Survival
|
The
indemnities set forth herein shall survive the delivery or return of the
Collateral, the Transfer of any interest by any Note Holder of its Equipment
Note and the expiration or other termination of this Agreement, any other
Operative Agreement or any Policy Provider Document.
|
Reproduction
of Documents
|
This
Agreement, all schedules and exhibits hereto and all agreements, instruments
and
documents relating hereto, including, without limitation, (a) consents, waivers
and modifications that may hereafter be executed and (b) financial
statements, certificates and other information previously or hereafter furnished
to any party hereto, may be reproduced by such party by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process, and such party may destroy any original documents so reproduced. Any
such reproduction shall be as admissible in evidence as the original itself
in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction likewise is admissible in
evidence.
|
Counterparts
|
This
Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts (or upon separate signature pages bound
together into one or more counterparts), each of which when so executed shall
be
deemed to be an original, and all of which counterparts, taken together, shall
constitute one and the same instrument.
|
No
Waiver
|
No
failure on the part of any party hereto to exercise, and no delay by any party
hereto in exercising, any of its respective rights, powers, remedies or
privileges under this Agreement or provided at Law, in equity or otherwise
shall
impair, prejudice or constitute a waiver of any such right, power, remedy or
privilege or be construed as a waiver of any breach hereof or default hereunder
or as an acquiescence therein nor shall any single or partial exercise of any
such right, power, remedy or privilege preclude any other or further exercise
thereof by it or the exercise of any other right, power, remedy or privilege
by
it. No notice to or demand on any party hereto in any case shall, unless
otherwise required under this Agreement, entitle such party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any party hereto to any other or further action in
any
circumstances without notice or demand.
|
Notices
|
Unless
otherwise expressly permitted by the terms hereof, all notices, requests,
demands, authorizations, directions, consents, waivers and other communications
required or permitted to be made, given, furnished or filed hereunder shall
be
in writing (it being understood that the specification of a writing in certain
instances and not in others does not imply an intention that a writing is not
required as to the latter), shall refer specifically to this Agreement or other
applicable Operative Agreement, and shall be personally delivered, sent by
facsimile or
telecommunication
transmission (which in either case provides written confirmation to the sender
of its delivery), sent by registered mail or certified mail, return receipt
requested, postage prepaid, or sent by overnight courier service, in each case
to the respective address, or facsimile number set forth for such party in
Schedule 1, or to such other address, facsimile or other number as each party
hereto may hereafter specify by notice to the other parties hereto. Each such
notice, request, demand, authorization, direction, consent, waiver or other
communication shall be effective when received or, if made, given, furnished
or
filed (a) by facsimile or telecommunication transmission, when confirmed, or
(b)
by registered or certified mail, three Business Days after being deposited,
properly addressed, with the U.S. Postal Service.
|
GOVERNING
LAW; SUBMISSION TO JURISDICTION;
VENUE
|
(a) THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS ITSELF TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE CITY
AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW
YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT
TO
ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
(c) EACH
PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES THAT SERVICE OF ANY AND
ALL
LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS SET
FORTH PURSUANT TO SECTION 12.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 12.8(c), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON
SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.
(d) EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE,
IN
ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN ANY OF THE ABOVE-NAMED
COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM,
THAT
VENUE FOR THE ACTION OR PROCEEDING IS
IMPROPER
OR THAT THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED
IN
OR BY SUCH COURTS.
(e) EACH
PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR
CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING OUT
OF OR
RELATING TO THIS AGREEMENT.
|
Third-Party
Beneficiary
|
This
Agreement is not intended to, and shall not, provide any person not a party
hereto (other than the Indenture Indemnitees, each of which is an intended
third
party beneficiary with respect to the provisions of Section 8.1 and, in the
case of the Tax Indemnitees, Section 8.3) with any rights of any nature
whatsoever against any of the parties hereto and no person not a party hereto
(other than the Indenture Indemnitees, with respect to the provisions of
Section 8.1 and, in the case of the Tax Indemnitees, Section 8.3) shall
have any right, power or privilege in respect of any party hereto, or have
any
benefit or interest, arising out of this Agreement.
|
Entire
Agreement
|
This
Agreement, together with the other Operative Agreements, on and as of the date
hereof, constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof, and all prior or contemporaneous understandings
or
agreements, whether written or oral, among any of the parties hereto with
respect to such subject matter are hereby superseded in their
entireties.
|
Further
Assurances
|
Each
party hereto shall execute, acknowledge and deliver or shall cause to be
executed, acknowledged and delivered, all such further agreements, instruments,
certificates or documents, and shall do and cause to be done such further acts
and things, in any case, as any other party hereto shall reasonably request
in
connection with the administration of, or to carry out more effectually the
purposes of, or to better assure and confirm into such other party the rights
and benefits to be provided under this Agreement and the other Operative
Agreements.
[This
space intentionally left blank]
IN
WITNESS WHEREOF, each of the parties has caused this Note Purchase Agreement
to
be duly executed and delivered as of the day and year first above
written.
|
CONTINENTAL
AIRLINES, INC.
|
||
| Owner | ||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
|
WILMINGTON
TRUST
COMPANY,
|
||
|
not
in its individual capacity, except as
expressly
provided herein, but solely as
Mortgagee
|
||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
|
WILMINGTON
TRUST
COMPANY,
|
||
|
not
in its individual capacity, except as
expressly
provided herein, but solely as Pass
Through
Trustee under the Pass Through Trust
Agreement
for the Continental Airlines Pass
Through
Trust, 2006-1G
|
||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
|
WILMINGTON
TRUST
COMPANY,
|
||
|
not
in its individual capacity, except as
expressly
provided herein, but solely as Pass
Through
Trustee under the Pass Through Trust
Agreement
for the Continental Airlines Pass
Through
Trust, 2006-1B
|
||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
|
WILMINGTON
TRUST COMPANY,
|
||
|
not
in its individual capacity, except as
expressly
provided herein, but solely as
Subordination
Agent
|
||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
|
Account
for Payments
|
Address
for Notices
|
||||
| Continental Airlines, Inc. |
JPMorgan
▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Account
No.: ▇▇▇-▇-▇▇▇▇▇▇
ABA#:
021-000021
Reference:
Continental Spare Parts-06
|
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇.
▇▇▇-▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Treasurer
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
|
Wilmington
Trust Company, Mortgagee
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: 076969-000
ABA#:
▇▇▇▇▇▇▇▇▇
Attention:
Corporate Trust
Administration
Reference:
Continental Spare Parts-06
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
|
Wilmington
Trust Company, as Subordination Agent
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: 076970-000
ABA#:
▇▇▇▇▇▇▇▇▇
Attention:
Corporate Trust
Administration
Reference:
Continental Spare Parts-06
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
|
Wilmington
Trust Company, as Pass Through Trustee for the 2006-1G Pass Through
Trust
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: 076971-000
ABA#:
▇▇▇▇▇▇▇▇▇
Attention:
Corporate Trust
Administration
Reference:
Continental Spare Parts-06
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
|
Wilmington
Trust Company, as Pass Through Trustee for the 2006-1B Pass Through
Trust
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: 076972-000
ABA#:
▇▇▇▇▇▇▇▇▇
Attention:
Corporate Trust
Administration
Reference:
Continental Spare Parts-06
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
SCHEDULE 2
- CERTAIN TERMS
|
CERTAIN
TERMS
|
Defined
Term
|
Definition
|
|
Initial
Period Debt Rate
|
In
the case of the Series G, 5.6325% per annum and, in the case of the
Series B, 8.4075% per annum.
|
|
Redemption
Price
|
$292,673,230.
|
[Opinion
of Special Counsel to Owner]
[Opinion
of Legal Department of Owner]
[Opinion
of Special Counsel to Mortgagee and to the Pass Through
Trustees]
|
EXHIBIT D
TO
NOTE
PURCHASE AGREEMENT
|
[Opinion
of Special Counsel in Oklahoma City, Oklahoma]
|
EXHIBIT E
TO
NOTE
PURCHASE AGREEMENT
|
RELEASE
The
undersigned hereby releases from the terms of the encumbrances described
on the
attached Appendix, which shall be of no further force or effect, all of its
right, title and interest in and to the collateral covered thereby.
Dated
this _____ day of __________, 2006.
|
WILMINGTON
TRUST COMPANY
as Security Agent
|
||
| |
By:
|
|
| Title: | ||
|
|
||
APPENDIX
Spare
Parts Security Agreement dated as of December 6, 2002, by Continental Airlines,
Inc. in favor of Wilmington Trust Company as Security Agent, recorded by
the
Federal Aviation Administration on January 9, 2003, as Conveyance No. J001986,
as amended by Amendment No. 1 to Spare Parts Security Agreement dated as
of May
9, 2003, recorded on May 13, 2003 as Conveyance No. MM024723, supplemented
by
Supplemental Security Agreement No. 1 dated as of July 29, 2003, recorded
on
August 5, 2003, as Conveyance No. XX024435 and further amended by Amendment
No.
2 to Spare Parts Security Agreement dated as of April 16, 2004, recorded
on
April 26, 2004, as Conveyance No. Y008129.